KUALA LUMPUR: The government has agreed to exempt the imposition of Capital Gains Tax (CGT) and taxes on Foreign Sourced Income (FSI) on unit trusts to make capital market investments in Malaysia rakyat-friendly, according to Finance Minister II Datuk Seri Amir Hamzah Azizan.
“Through the various engagements we’ve had on this matter, it has come to our attention that one unintended area impacted by CGT is unit trusts, given that more than 90% of unit trust holders are individuals,” he said in his keynote address at the launch of Bursa Malaysia as a multi-asset exchange yesterday.
In the same event, the minister also officiated at the introduction of Bursa Gold Dinar, MyBURSA, Bursa Reach and Bursa Malaysia’s new logo. MyBURSA is a customer portal and Bursa Reach is a platform to connect investors directly with dealer representatives.
The exemption on FSI is in effect from Jan 1, 2024 until Dec 31, 2026. Meanwhile, the exemption on CGT is effective from Jan 1, 2024 until Dec 31, 2028.
Amir Hamzah said the government will continue to make capital market investments in Malaysia rakyat-friendly.
“This is to ensure that the rakyat will continue to benefit wholly from the gains of their hard-earned money, and invest for their future,” said Amir Hamzah.
The government introduced CGT in Budget 2024 in line with international best practices and to expand the tax base.
The scope for CGT focused on gains from the disposal of unlisted shares by companies. Disposals of listed shares and disposals by individuals are not subject to CGT.
Bursa Gold Dinar that was launched at the event is an app-based digital investment platform backed by real gold bars and coins.
Amir Hamzah said that this platform provides syariah-compliant investment that all strata of the Rakyat can participate in and build their financial security, true to Ekonomi Madani’s mission to elevate Islamic economy.
“This will not only open up new investment opportunities, but also the door to economic inclusivity, where every layer of society, regardless of economic status, has access to viable investments,” he said.
Additionally, he added that the other two platforms launched, MyBURSA and BURSA REACH will also open up more investment and trading opportunities for more Malaysians.
Meanwhile, he stated the reforms initiated by the Madani Government are yielding green shoots.
“The Ekonomi Madani framework has provided a clear roadmap to propel Malaysia to a higher economic value chain, and breathed confidence into global investors,” he said.
In the first nine months of 2023, Malaysia secured RM225 billion in approved investments. This represents a 6.6% increase from a year earlier, bringing it to the highest amount for the corresponding period over the past decade.
Amir Hamzah said that this indicates that investors have responded well to the Ekonomi Madani vision, along with the supporting policy documents, namely the National Energy Transition Roadmap, the New Industrial Master Plan 2030, and the Mid-term Review of the 12th Malaysia Plan.
“The economic framework, along with the policy documents, demonstrate the government’s commitment to elevate Malaysia’s position in the global supply chain and embolden our businesses’ ESG values.
“In the coming months and years, the government will see through the execution of these policy documents and ensure that Ekonomi Madani’s vision will become a reality,” he said.
Meanwhile Bernama reported that Bursa Malaysia Bhd expects the capital market to continue performing well in 2024 compared to last year based on the encouraging numbers recorded for the first half of January, according to its chairman Tan Sri Abdul Wahid Omar.
He said the exchange saw foreign investments totalling RM448 million for the first 15 days of the year that helped push the FTSE Bursa Malaysia KLCI (FBM KLCI) to close above 1,500 points on Monday.
“We also saw average daily trading value (ADTV) increasing to RM3.25 billion, 50% higher than the RM2.06 billion ADTV recorded for the whole of 2023,“ he said.
Abdul Wahid noted that Bursa Malaysia still commands the attention of foreign institutional investors, accounting for 29.2% of the bourse’s securities market trading participation in 2023 in terms of ADTV, compared to 26.8% in 2022.
He said the FBM KLCI is currently valued at a forward price-to-earnings ratio of 13.3 times (x), significantly lower than its 10-year average of about 15.5x.
“We are hopeful that the market will continue to do well in 2024 and we expect to see more investor interest going forward,“ he said.
